Ramesh Chand Panel

News: The government recently formed an 18-member panel, led by NITI Aayog’s Ramesh Chand, to revise the Wholesale Price Index (WPI) base year and plan a shift to the Producer Price Index (PPI). Ramesh Chand Panel

About Ramesh Chand Panel

• The panel was set up to update the base year of the Wholesale Price Index (WPI) from 2011-12 to 2022-23.
• Its key responsibilities include:
  • Proposing a revised commodity basket for both the WPI and Producer Price Index (PPI) based on the 2022-23 base year.
  • Reviewing the existing price collection system and suggesting enhancements.
  • Determining the computational methodology for the WPI and PPI.
• The panel comprises economists from the government, rating agencies, asset management firms, banks, and representatives from the government and the Reserve Bank of India.

About Wholesale Price Index (WPI)

• Released by: The Office of Economic Advisor, Department of Industrial Policy and Promotion, Ministry of Commerce and Industry
• WPI measures changes in the prices of goods sold and traded in bulk at the wholesale level.
• It doesn’t reflect inflation for the common public, as they purchase products at retail, not wholesale prices.
• WPI excludes the service sector, which covers about 55% of GDP.
• Base Year: Currently 2011-12, being revised to 2022-23.
• Number of Items: Covers 697 items, including 117 primary goods, 16 fuel and power items, and 564 manufactured products.

About Producer Price Index (PPI)

• PPI measures wholesale prices from the point of view of producers of goods and services by tracking prices at different stages of production.
• PPI differs from WPI as it tracks the average change in prices received by producers and excludes indirect taxes.
• It focuses on inflation from the perspective of industries and businesses, measuring price changes at production stages before final goods and services reach consumers.
• Unlike WPI, which only includes goods, PPI also covers services.
• PPI has replaced WPI in most countries as it aligns with the internationally accepted System of National Accounts (SNA) for measuring economic activity.